6/29/16 was in fact down. The amount was -0.24, right in line with projections. That puts the component at 84.80 2.10 over where the NNNs are trading. With the NNNs being down 0.35, traders are more and more convinced that the index is headed lower and that is exactly what we saw this morning. I guess retailers are now geared up for the holiday demand surge that usually occurs this time of the year.

The six-day moving average carcass weight continued lower at 209.4# down 1.93# from one-year ago. Index hogs were lighter at 208.28# and packers hogs were +1.50# heavier than non-packer hogs. If there are more hogs this year as reported by the USDA, producers seem to be keeping very current in their shipments and the lighter carcass weights will lower the impact of larger numbers.

I tried to get short the NNNs on the opening but missed by 1 tic! I did sell a handful of V/Z spreads. It seems a little juicy for the VVVs to be eight points over the ZZZs. If the H&P report was correct in the larger numbers of lighter hogs, the VVVs may not be able to hold that premium to the ZZZs.

Best wishes,

dhm